TIGC’s first bowl of 2023 alphabet soup: PCI, JTC, DOR & GOP
Lately I’ve been working on about a half-dozen pieces that have to do in one way or another with the “cold case” I began focusing on about a year ago. Today I’ll hit the highlights (or lowlights) of some of those pieces and tease the follow-ups to come.
First, the 2021 PCI numbers are out and Georgia is still at the bottom of the heap. It was a little over a year ago that I took a deep dive into 2020 per capita income data produced by the U.S. Bureau of Economic Analysis (BEA) and discovered that Georgia had more counties and more people in the bottom national quartile for PCI than any other state. The 2021 data is no better. One-hundred-and-five of the 778 counties in the bottom national quartile are Georgia counties, and those counties are home to 3.2 million people — right at 30 percent of the state’s population. Only Texas, with nearly triple Georgia’s population, has more residents — 3.4 million — in that bottom quartile. North Carolina, with roughly the same population as Georgia and comparable economic and education metrics, has less than a third as many of its citizens in that bottom quartile. Poor ol’ hapless Wheeler County, Ga., still ranks 3,113th out of 3,113 U.S. counties for the second year in a row.
Second, it’s increasingly difficult to ignore the juxtaposition between the state’s PCI performance and its shift to Republican governance. As I noted in one piece on this issue, Georgia made remarkable progress in raising the state’s per capita income in the final years of the 20th century and then surrendered all that progress in the opening years of the 21st century. That rise-and-fall pattern coincided perfectly with the final years of Democratic leadership at the Gold Dome and the opening years of Republican leadership. I said in my early pieces on this subject that I was reluctant to blame Republicans for the collapse in PCI performance, but the question seems a fair one. Sonny Perdue, who defeated incumbent Democratic Governor Roy Barnes in 2002 and became Georgia’s first Republican governor in more than a century, oversaw the biggest decline in PCI performance in at least the last half-century. Under his leadership, Georgia’s per capita income fell from 94.6 percent of the national average to 85.6 percent and we dropped in rank from 26th place to 41st. To be fair, Perdue presided over one of the most challenging economies in the state’s history; he took office in the wake of 9/11 and governed through the Great Recession. But he was hardly alone; 49 other governors faced the same challenges. The question is, why did Georgia fare so much worse during this period than nearly all other states? In the 20 years from the beginning of Democrat Joe Frank Harris’s first term in 1983 and the end of Barnes’s four-year tenure, only one state — Vermont — gained more ground; in the 20 years from the beginning of Perdue’s tenure through the first three years of Governor Brian Kemp’s first term, only one state — Delaware — lost more ground.
Third, one possible answer to that question that deserves more attention is whether Georgia is paying an economic development price for cuts to education. Governor Perdue and his successor Nathan Deal chopped billions of dollars out of the state’s education budget. In what may have been a prescient Georgia Trend column headlined “Perdue’s sad legacy,” the late Tom Crawford wrote this in March 2009: “Georgia is competing against other states to lure sophisticated, high-tech businesses at the same time that we’re spending $2 billion less to train and educate the prospective work force. This doesn’t make any sense at all.” At the same time Crawford wrote that column, rural Georgia enrollment in University System of Georgia institutions was beginning a significant downhill slide. In 2013, the Fiscal Research Center at Georgia State University produced a report titled “Population, Employment, and Income Trends for Georgia and Atlanta.” Authored by Professor David Sjoquist, that report noted several softening economic trends and listed educational performance as one of the possible reasons why. “It is possible that the relative low performance of the K-12 education system is slowing growth,” Sjoquist’s report said. “The skill level required for most jobs has increased, which means an educated labor force has become increasingly important for attracting jobs. On lots of dimensions, Georgia’s K-12 education system performs well below the national average.” That report went on to note that Georgia ranked “19th in terms of the percentage of the population with at least a college degree,” but neglected to mention that those college graduates were concentrated overwhelmingly in the Atlanta area.
Fourth (and this is being really, really, really charitable), Georgia’s Job Tax Credit ain’t working as originally planned. This program was created in the early 1990s and basically codified raising per capita income, reducing poverty, and creating jobs as important economic development objectives. Initially, the JTC program focused solely on the state’s 40 poorest counties — as determined by a formula that factored in county-level PCI, poverty rates, and unemployment rates. Over time, the program has been expanded in several ways. It now includes all 159 counties, no matter how prosperous, and the counties have been placed in one of four tiers, depending on how they score on the PCI/Poverty/Unemployment formula. Tax credit amounts have been increased and the number of new jobs a business has to create to qualify for the credits has been reduced. When the program was launched in 1991, a company had to create a minimum of 10 jobs in one of the state’s Bottom-40 counties to qualify for a $1,000 per job credit; now, the minimum requirement for those Bottom-40 is down to two jobs and each one entitles the job creator to a $3,500 tax credit. But even that isn’t working — at least not for Georgia’s poorest counties. According to a report by the Georgia Department of Revenue (DOR), $56.7 million in tax credits were claimed in 2021 for the creation of 20,417 jobs. My analysis of that report found that only 1,734 of those jobs were created in that year’s Bottom 40 counties, and 20 of those counties didn’t get a single new JTC-supported job. In contrast, Fulton County alone picked up 5,974 new JTC-supported jobs.
Fifth and last, stir all this data together in a big pot and it pretty much boils over with irony. Perhaps the biggest of these is political. According to the above-mentioned DOR report, 79 of Georgia’s 159 counties didn’t get a single new JTC-supported job in 2021; in the 2022 governor’s race, 71 of those counties went for incumbent Republican Governor Brian Kemp. This includes three of the four counties — Brantley, Glascock and Pierce — that gave 90 percent of their vote to Kemp; the fourth of Kemp’s 90-percent counties — Banks — snagged 22 such jobs. Fully 60 percent of the 2021 jobs created under the JTC program went to Democratic counties.
Watch this space. There’s more to come on all these topics.
Copyright Trouble in God’s Country 2023